Shares of Hindustan Foods surged nearly 15% to Rs 568 on BSE in Friday’s trade, surging 37% over the past two sessions, after rising from Rs 10 per share on the ex-dividend day to Thursday per share Rs 2.

Shares of diversified companies were trading at new 52-week highs. The stock has risen 63% in the past month, compared with the S&P BSE Sensex’s 7.7% gain.

Hindustan Foods has set July 22, 2022, as the record date to subdivide each equity share of Rs 10 each into five shares of Rs 2 each.

The company said the rationale behind the split was to encourage wider participation by retail investors, make shares more affordable, and improve the liquidity of the company’s shares on the stock market.

A stock split is a corporate action in which a company divides its stock into multiple new shares. Splitting shares neither adds any new value nor dilutes shareholder ownership. What they did, however, was increase the number of shares in the company.

The main benefit of a stock split is that the liquidity of a company’s stock generally increases. As retail investors now have easier access to stocks, more will show increased demand for stocks, which can increase OTC liquidity. It is much easier to buy and sell stocks after a stock split.

Hindustan Foods is principally engaged in the contract manufacturing of Fast Moving Consumer Goods (FMCG) products, primarily including Home Care, Personal Care, Food and Refreshment, Tea Packaging and Footwear.